Louis Dreyfus Co. Holdings B.V. (LDCH) announced that the group has signed an agreement to sell an indirect 45% equity stake in Louis Dreyfus Co. B.V. (LDC) to ADQ, a large holding company based in Abu Dhabi, United Arab Emirates (UAE). As part of this transaction, LDC has also signed a long-term commercial supply agreement with ADQ for the sale of agricultural commodities to the UAE.
“The transaction announced today constitutes a milestone in a decade-long strategy envisioned by the supervisory board, which started with the consolidation of LDC's parent company's shareholding,” said Margarita Louis-Dreyfus, chair of the LDCH supervisory board. “We are delighted to welcome ADQ to our shareholder group as long-term partners and investors, with a common vision for LDC's future, and experience that will bring further value to the business and support the group's ambitions.”
ADQ's broad portfolio of major enterprises spans multiple sectors, among them food and agriculture. As part of its strategy for the sector, the company seeks to generate financial returns and strengthen the economic cluster in the UAE.
ADQ chief executive officer said H.E. Mohamed Hassan Alsuwaidi, “As one of the world's leading agri-commodities and food companies, LDC represents a strategic investment opportunity for ADQ, in line with our long-term food and agriculture investment strategy. We share LDC's vision for future growth of the business and look forward to partnering with LDC's existing shareholders and management team to capitalize on the sector's emerging opportunities by accelerating LDC's transformative growth strategy to move towards greater value chain integration — from producers to consumers."
Upon completion of the transaction, a portion of the proceeds of the sale amounting to a minimum of $800 million will be invested into LDC to support the pursuit of the company's long-term business plan and strategy, including the acceleration of strategic investments.
“Our strategy aims to leverage global consumption trends through investments in new business opportunities, as the company embraces more of the agricultural value chain to become an increasingly integrated food, feed, fibers and ingredients company,” LDC Group CEO Michael Gelchie said. “With a shared ambition for investment in innovations and technologies that can transform food and agricultural production, the investment potential created by the long-term partnership with ADQ brings additional strength to the pursuit of LDC's strategic growth plans, building on the strong performance delivered in the first half of 2020.”
LDC remains focused on putting its strategy into action while fulfilling its key role to keep essential food and feed supply chains moving, helping to ensure global access to food.
“LDC will continue to leverage its core historic capabilities to efficiently analyze and capture opportunities in a rapidly changing context while pursuing our vision to shape resilient food supply chains, guided by our purpose to create fair and sustainable value for the benefit of current and future generations,” Margarita Louis-Dreyfus added. “As we embark on the next stage of LDC's development, we look forward to working with ADQ toward the realization of that shared vision.”
Completion of the agreement is subject to customary closing conditions, including regulatory approvals.
LDC is a leading global merchant and processor of agricultural goods whose activities spanning the entire value chain, from farm to fork, across a broad range of business lines. Since 1851, the company's portfolio has grown to include grains and oilseeds, coffee, cotton, juice, rice, sugar, freight and global markets.
LDC originates, processes and transports approximately 80 million tons of products each year and is active in more than 100 countries, with approximately 18,000 employees globally.